The Social Security Administration announced this week retirees would see a 3.2% increase in benefits in 2024, an adjustment that will cost the government billions of dollars more.

Cost-of-living adjustments, known as COLAs, happen every year in order to insulate Social Security beneficiaries from inflation, which has proven especially pernicious over the past couple of years.

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When contacted by the Washington Examiner, a spokesperson with the SSA said that additional payments to social security beneficiaries would be about $47 billion because of the 3.2% COLA.

The new 2024 adjustment is far more modest than this past year. The 2023 adjustment was a whopping 8.7%, which came because of how hot the inflation was in 2022.

“Social Security and SSI benefits will increase in 2024, and this will help millions of people keep up with expenses,” said Kilolo Kijakazi, acting commissioner of Social Security.

Inflation has largely declined this year, although it is still higher than it should be. Inflation was running at a 3.7% annual rate as of September. The adjustment is about in line with the Federal Reserve’s expectations for the rest of the year. The Fed predicts inflation will fall to 3.3% by the end of 2023.

Marc Goldwein, senior policy director with the Committee for a Responsible Federal Budget, told the Washington Examiner that the increased costs are about in line with expectations. He said that while the SSA will pay out some $47 billion more next year, that isn’t unexpected because they were already projecting a COLA in that 3.2% range.

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“To my mind, it’s not a new cost. It’s a cost that is already a part of the program and we already assumed was going to happen,” Goldwein said.

Alongside the COLA update, the maximum amount of earnings subject to the Social Security tax will also see an increase from $160,200 to $168,600.